Bush, Paulson Outline Plan to Buy $250B Stake in Banks

By Newser Editors and Wire Services
Posted Oct 14, 2008 7:43 AM CDT
Treasury Secretary Henry M. Paulson Jr. told banks Monday that they essentially had to accept the government's plan in order to restore investor confidence and keep cash from fleeing overseas.   (AP Photo/Manuel Balce Ceneta)
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(Newser) – President Bush this morning confirmed the government's $250 billion plan to buy shares in banks, in the latest move to calm the turmoil in the financial markets and stave off a deep recession. Speaking from the Rose Garden after an early-morning meeting with economic advisers, Bush said the move will help restore confidence and "return our economy to the path of growth and prosperity."

Treasury Secretary Henry Paulson later addressed the nation, urging banks “not to take this new capital and hoard it, but to deploy it” to spur economic growth, Bloomberg reports. Paulson reiterated limits on executive pay and golden parachutes, assuring investors the bailout is for the economy, not for the banks. “These are healthy institutions, and they have taken this step for the good of the US economy,'' Paulson said.